Question 1

Leicestershire Renovations has a history of problems with customers who do not pay their bills on time. Leicestershire Renovations wants to improve its cash situation, reduce bad debts, and reduce credit-collection costs. Which of the following forms of pricing would most likely help the firm achieve its goal?

Accepted Answer

Offering cash discounts to customers who pay their bills on time can incentivize timely payment and improve the company's cash flow. It can also reduce bad debts and credit-collection costs by encouraging customers to pay their bills sooner. By-product pricing, zone pricing, product bundling, and quantity discounts may not directly address the issue of late payments and bad debts.

Question 2

Explain product line pricing.

Accepted Answer

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Question 3

Give two examples of product bundle pricing.

Accepted Answer

The answer of Give two examples of product bundle pricing....

Question 4

Which of the following is a price adjustment strategy?

Accepted Answer

Discount and allowance pricing is a price adjustment strategy that involves reducing the price of a product or offering allowances to customers. This can be done to encourage customers to make a purchase, to clear out old inventory, or to reward loyal customers. The other choices listed are pricing strategies, but not necessarily price adjustment strategies.

Question 5

The discount offered by Glamor Gifts to customers who bought Valentine-themed merchandise the week following Valentine's Day is an example of a ________.

Accepted Answer

The discount offered by Glamor Gifts is a seasonal discount because it is linked to a particular holiday and is only offered for a limited time after that holiday has passed.

Question 6

Solar Tanning Salon prices tanning sessions at $25 per visit. It also offers seasonal passes for $175 that allow the customer to visit the salon multiple times in a year. This is an example of a(n) ________.

Accepted Answer

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Question 7

What should the price steps of product line pricing take into account?

Accepted Answer

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Question 8

Some industries commonly use two-part pricing, breaking the price down into a fixed fee and a fixed usage rate.

Accepted Answer

The answer of Some industries commonly use two-part pricing, breaking...

Question 9

Which of the following price adjustment strategies offers a price reduction to buyers who pay their bills promptly?

Accepted Answer

A cash discount offers a price reduction to buyers who pay their bills promptly. Season discounts are offered based on the time of year, quantity discounts are offered for buying in bulk, trade discounts are offered to members of the same industry and functional discounts are offered based on the buyer's role in the distribution channel.

Question 10

When a manufacturer seeks a market for by-products and accepts a price that covers more than the cost of storing and delivering those by-products, the manufacturer is able to reduce the main product's price to make it more competitive.

Accepted Answer

By finding a profitable market for by-products, the manufacturer is able to offset some of the costs of producing the main product and thus reduce its price to make it more attractive to customers.

Question 11

Which of the following price adjustment strategies involves reducing prices to reward customer responses such as volume purchases, paying early, or participating in sales-support programs?

Accepted Answer

Discount and allowance pricing involves reducing prices to reward customer responses such as volume purchases or paying early. The other pricing strategies listed do not specifically involve rewarding customer responses in this way.

Question 12

Give two examples of products for which marketers might use optional-product pricing.

Accepted Answer

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Question 13

Give two examples of products for which captive product pricing might be used.

Accepted Answer

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Question 14

A(n) ________ refers to promotional money paid by manufacturers to retailers in return for an agreement to feature the manufacturer's products in some way.

Accepted Answer

An allowance is a promotional money paid by manufacturers to retailers in return for an agreement to feature the manufacturer's products in some way, such as in-store displays or special promotions. Samples are small amounts of a product given away to customers to try, discounts are reductions in price, and tax credits/exemptions are related to taxes and not relevant to this question.

Question 15

Give two examples of by-product pricing.

Accepted Answer

The answer of Give two examples of by-product pricing....

Question 16

A seller offers a ________ to trade-channel members who perform certain functions, such as selling, storing, and record keeping.

Accepted Answer

A functional discount is offered to trade-channel members who perform certain functions, such as selling, storing, and record keeping. The discount is given as a reward for performing these functions and helps to incentivize and motivate the trade-channel members to continue doing business with the seller.

Question 17

A(n) ________ is a straight reduction in price on purchases during a stated period of time or of larger quantities.

Accepted Answer

A discount is a straight reduction in price on purchases during a stated period of time or of larger quantities.

Question 18

A quantity discount is a price reduction for buyers who ________.

Accepted Answer

A quantity discount is a price reduction for buyers who buy merchandise in bulk.

Question 19

Sensenig Propeller manufactures replica antique wooden airplane propellers. In the process of production, the company generates a great deal of scrap hardwood. How can using by-product pricing benefit the company?

Accepted Answer

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Question 20

When using product bundle pricing, sellers combine several of their products and offer the bundle at an increased price for increased profit.

Accepted Answer

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Quiz 11: Pricing Strategies: Additional Considerations